Could it be that the free market still works?

There’s been a lot of talk of late about how the federal government should jump into the mortgage market and either entice or force servicers to rewrite big swaths of loans in order to keep homeowners out of foreclosure. It’s kind of a crazy, but right before the weekend JP Morgan Chase announced it would be implementing such a program all on its own. First order of business: a 90-day moratorium on new forecloses. Remember once hearing that come out of a particular politician’s mouth?

Which might tell us all we need to know about how to handle the foreclosure crisis. We don’t actually need a big new government-mandated plan—but we do need to keep talking about how we’re going to get one. Scare the mortgage lenders and servicers into thinking the feds are going to come along and tell them their business, and see if they can gin up some ways to take control of the conversation.

Of course, loyal readers know that I am slightly suspicious about the long-term sustainability of mass modifications. But maybe we should take this one step at a time.